Social responsibility and AML failings result in sanctions for 3 more UK licensed online gambling operators

The Gambling Commission has today (28 October 2020) announced the outcome of operating licence reviews conducted against the following three UK-licensed online gambling operators for social responsibility and money laundering failures:

  • BGO Entertainment Limited,
  • GAN PLC and
  • NetBet Enterprises Limited.

The Commission’s announcement states:

Three online gambling operators have been investigated by the Gambling Commission for social responsibility and money laundering failures as part of the Commission’s ongoing drive to raise standards through its tough enforcement action. 

BGO Entertainment Limited, GAN PLC and NetBet Enterprises Limited were all subject to licence reviews following a number of failures which included not doing enough to keep consumers safe and failing to prevent money laundering and criminal spend.

As a result of those reviews, two of the businesses, BGO and Gan PLC, have had new conditions imposed on their licences and all three will now improve their policies and procedures as well as making payments to progress the work of the National Strategy to Reduce Gambling Harms.  The Commission will also be reviewing the actions of the individual Personal Management Licence holders in all three of these cases

Richard Watson, executive director at the Gambling Commission, said:

“Licensees must protect consumers from harm and treat them fairly. Our recent investigations uncovered a variety of consumer protection and anti-money laundering failings at each of these three operators and as a result we are using a range of enforcement tools against them.  We will continue to crack down on failing operators through our tough and proactive compliance and enforcement work.” 

It goes on to summarise the sanctions imposed in relation to each operator as follows:

BGO Entertainment Limited 

BGO failed to have effective policies and procedures in place for customers who may be displaying signs of problem gambling between 25 September 2018 and 23 March 2020. It also failed to have effective and adequately resourced anti-money laundering controls in place between 25 September 2018 and 21 July 2020.

As a consequence BGO will have additional conditions imposed on its licence which involve carrying out extra social responsibility and anti-money laundering checks on its top customers. The business will also pay £2m to support the implementation of the National Strategy to Reduce Gambling Harms.

GAN PLC

Between August 2018 to September 2019 GAN failed to comply with four licence conditions focused on social responsibility and anti-money laundering. Failures included having ineffective anti-money laundering policies and procedures, not displaying warnings that underage gambling is an offence on its website and poor customer interaction guidance.

As a consequence GAN will have additional conditions imposed on its licence which involve continued reviewal of the effectiveness and implementation of its AML and SR policies, procedures and controls, and extra training for personal management licence holders and senior staff. The business will also pay £146,000 to progress the National Strategy to Reduce Gambling Harms.

NetBet Enterprises Limited

Between 20 November 2018 and 29 May 2019 NetBet failed to comply with two licence conditions focused on social responsibility and anti-money laundering. Failures included not carefully scrutinising source of funds documentation provided by customers and not implementing its responsible gambling policy effectively.

As a consequence NetBet will make a number of changes to its processes including giving greater regard to the log-in time of its customers during responsible gambling customer assessments, automatic limits placed on customers demonstrating early signs of problem gambling and providing consumers with access to an affordability calculator.

The business will also pay £748,000 to progress the National Strategy to Reduce Gambling Harms.

You can download below each of the three respective public statements published by the Commission.

The Commission identifies within those public statements the following questions that it says other operators should consider:

  1. Arising from the case of BGO Entertainment Limited:
    • Do you have policies and procedures in place to identify customers who may be experiencing or at risk of developing problems with their gambling?
    • Do you have systems in place to identify potential problem gamblers?
    • Do these include appropriate trigger points for when the usual pattern of gambling becomes unusual (these should not be just financial)? How do you protect new customers (where a pattern of play cannot yet be established)?
    • Are your staff sufficiently trained to spot problem gamblers and know how to report concerns? Are there clear procedures once a concern has been raised?
    • Do you know your customer (KYC)? Are you gaining a holistic picture of the customer’s source of funds, particularly in relation to VIP customers?
    • Are you critically assessing assurances you receive as to source of funds?
    • Have you ensured you have clear, up-to-date, and fit for purpose Responsible Gambling Policy which takes into account the Commission’s guidance and includes a customer’s affordability?
    • Have you ensured you have clear, up-to-date, and fit for purpose AML policies and procedures available to all who require guidance?
    • Have you ensured your policies and procedures have been informed by our guidance on AML?
    • Have you taken into account the Commission’s Money Laundering and terrorist financing risk assessment?
  2. Arising from the case of GAN PLC:
    • Are your policies and procedures for identifying high risk customers for AML and SR customer accounts effective?
    • Are your policies and procedures being reviewed regularly?
    • Have you adequately resourced your AML and SR departments, so your staff are always able to put your policies and processes in place for all customers?
    • Have your staff received sufficient AML and SR training?
    • Are you recording all customer interactions, including decisions not to interact with customers, and are these records available for colleagues to refer to when making decisions
    • Are your customers providing documentation to support their level of spend and loss, and not simply giving assurances?
  3. Arising from the case of NetBet Enterprises Limited:
    • Do you have formal processes in place to measure the effectiveness of your AML and RG policies and are findings adequately recorded?
    • Do you efficiently record all compliance-related decisions and are you able to demonstrate to the Commission, on request, evidence of ongoing assessment, evaluation and improvement?
    • Do lessons learned from public statements flow into your policy and processes?
    • Are your customer risk profiles formed by or linked to your money laundering and terrorist financing risk assessment?
    • Do you have a formalised process for analysing the effectiveness of customer interactions to ensure that reviews were adequately documented and consistent in their approach?
    • Do you log the types of behaviour which have triggered a customer interaction and keep sufficient records of interactions, along with decisions not to interact especially in terms of the level of detail provided?
    • Are all forms of individual customer interaction (i.e. Email, VIP engagement, customer service calls) recorded on the customer profile, which is the same data point to facilitate relevant staff easy access to monitor current and historical engagement with its customers.
    • Do you recognise that winning customers may still be problem gamblers?
    • Have your staff received sufficient AML and SR training?
Download article PDF: GAN PLC public statement 28.10.20